Summary

The compensations offered by life insurance cover are balanced with the benefits of critical illness cover. It is advisable to sign up for critical illness insurance now and the reasons why. 

Think about this question Could you pay your monthly bills, if illness prevented you from working? Most of us would say No. So clearly we need to contemplate insuring ourselves against unpredictable events.

A normal critical illness policy would pay out a tax free lump sum if the insurance holder is diagnosed with a potentially terminal illness. The lump sum can be spent in numerous ways. For instance, you could simply settle your bills, pay off your mortgage or make alterations to your home to accommodate a wheelchair.

The coming months will see a big price rise, so if you haven’t got any insurance cover at present, now is the time to sign up. The cost of life insurance has come down over the past fifteen years. There are various reasons why this has happened. Firstly the Aids epidemic, that was expected in 1998-1984 never materialised and secondly the recovery rate of those undergoing heart attacks and cancer has significantly improved. These reasons have made it possible for insurers to lower premiums.

The converse is true for critical illness policies where the number of clients claiming has increased substantially recently and as a result premiums have increased. Protection insurance is frequently reassessed by insurers, when the amount of claims for certified illnesses are examined.

Following such a review Norwich Union will be modifying payments soon, with the cost of life insurance coming down slightly and the premiums for critical illness insurance cover increasing. The Insurance Company is unable to say by how much, as the individual’s situation and the amount insured for vary from person to person, but the rise should not be massive.

Then again Best Deal is predicting that there could be price rise of between twenty five and 50 per cent in critical illness cover payments in the next few months. It also suspects that fixed premiums may either become unaffordable for some people, or even die away because of the unsound marketplace.

Swiss Re has declared that it will not underwrite critical insurance policies from the end of the year as the policies are costing them too much. 

The cost of insurance has been increased by two of the big high street insurance companies. A thirty to thirty five per cent risehas recently been publicised by Legal and General and Swiss Life. However this is small beer compared to the unbelievable price increases written into the insurances now available from PPP and Standard Health Care, which differ between forty to fifty per cent.

It is presumed that this development will be followed by all the other re-insurers. Guaranteed monthly premiums where the monthly cost is held for a precise period, characteristically twelve years, may no longer be given by Insurance Companies.

Hereafter, premiumswill be re-evaluated annually, just like home and motor insurance. The outlay for the customer will be far larger in the long term. The message is clear. life insurance is becoming more pricey so sign up now to gain from fixed premiums and the comparatively low premiums being givenat present. Let us pray that you never have to make a claim, but data indicates that unfortunately many of us will.